Intelligence reports say that terror groups based in Pakistan are planning to set up base in Karnataka's coastal town of Karwar where INS Kadamba (the strategic navy base) is located.

Reports state that members of the dreaded Al-Badr outfit are targeting the coastal area and had even tried to transport weapons in stages.

IB sources revealed that this information had come out when the Coast Guard nabbed six men belonging to the Al-Badr in Kutch on July 13 while transferring fake currency and weapons.

Investigations had revealed that these men were planning to set up base in coastal Karnataka. It was also revealed that Kutch was only a test run, but their actual target was Karnataka, especially Karwar.

The Al-Badr intends to circulate fake currency, bring in RDX, ammunition and set up a network in Karnataka.

S C Tyagi, chief of staf, west coast, Coast Guard, said Karnataka is a soft target and the weak security system in the coastal area is a boon to the terrorists.

Reports also reveal that the gang arrested in Kutch had planned to smuggle fake currency worth Rs 4 crore and had earlier smuggled in fake currency worth Rs 30 lakh.

A senior Coast Guard officer told rediff.com that these men were equipped with global positioning systems, which they suspect could have been provided by Pakistan's intelligence agency, the ISI.

The officer also said some of the men who have already entered coastal Karnataka are involved in setting up sleeper cells for the Al-Badr and the Lashkar e Tayiba. To gain the trust of the public, they even get married to the local women, he said.